You may be familiar with Kabbage as a small business owner as it is an internet lender that provides small business loans and credit lines. You might be asking whether Kabbage files a Uniform Commercial Code (UCC) financing statement on your company if you’re thinking about borrowing from them or have previously done so.
In a nutshell, Kabbage does submit a UCC. Kabbage will submit a UCC financing statement to protect their interest in any assets you use as collateral when you seek for a loan or line of credit from them. If you don’t pay back the loan, this enables them to file a lawsuit to recover the debt.
What does this mean, though, for you, the borrower? It’s crucial to realize that a UCC filing may have an impact on your capacity to get more borrowing from other lenders. It can be more challenging to obtain authorized for another loan or line of credit if Kabbage has a UCC on your record since other lenders might view Kabbage’s claim on your assets as a possible concern.
A UCC filing can, however, be subordinated, which allows a different lender to agree to place its claim on your assets under Kabbage’s. This may make it easier for you to get more money, but it also puts the other lender’s money at danger if you can’t make your payments.
A UCC filing is valid in Illinois for five years after the date of filing. It will expire if a continuation statement is not filed after five years. To prevent any potential problems with your lenders, it’s crucial to keep track of your UCC filings and to make sure they are reissued if necessary.
Furthermore, it’s crucial to understand that a financing statement is not a lien. A UCC filing grants the lender a security interest in your assets rather than ownership of them. In other words, if you default on the obligation, the lender may file a lawsuit to recover the debt; but, they do not immediately become the owner of your assets.
You can release a UCC file that you hold with Kabbage by submitting a UCC-3 termination statement to the Illinois Secretary of State. The UCC filing will be deleted from the public record and Kabbage’s security claim in your assets will be terminated.
In conclusion, Kabbage will file a UCC financing statement to protect their interest in your assets if you borrow money from them. Despite the fact that you may be able to subordinate the file, this may have an impact on your capacity to get additional funding from other lenders. Illinois UCC filings have a five-year expiration date and can be cancelled by submitting a UCC-3 termination declaration.